Slot Winnings

IRS Proposes to Lower Threshold for Winnings

The IRS is proposing to lower the threshold for reportable winnings on slot machines from $1200 to $600. Simply put, this is a bad idea for many reasons, and I urge you to sign the petition in opposition to this proposal as well as comment on the IRS' website to say that you don't want the threshold lowered. I'll get to why the IRS' proposal is bad in a second.

First, I want to say that I'm not the type of person who complains that his taxes are too high. I don't mind paying my fair share (or even a little more than my fair share) to support the infrastructure of our country. That being said, the IRS' proposal would most likely have the opposite effect they want, which is to collect more money.

The proposal states that the threshold has been the same since 1977, so it's time for a change. It also states that there have been many advances made in the technology which will allow electronic reporting of winnings. These are their two main arguments.

It has been pointed out in several articles, including this one by Law360, that these assumptions by the IRS are false. Now, I don't play slots much, so it does not affect me personally. However, the arguments agaist this proposal are pretty strong:

* The process for filling out a W2 is not electronic, and it takes about 15 minutes for casino employees and the customer to get through the paperwork.
* There will be 3-5 times as many W2 filings, which will result in a lot more paperwork, casinos will have to hire employees, and there will be a lot more of a hassle.
* Fewer people will want to play slots, which will result in lower gaming revenue for states.

If anything, the threshold should be increased to about $4700 due to inflation. I hope that this proposal does not pass, and I hope you will join me in opposing it.